Category: SVOS

The apparent anointing of John Stankey as the next AT&T CEO is reportedly what prompted Elliott to announce its activist intentions.

Right now this insight comes courtesy of the WSJ alone, which has chatted to some people who think they know what they’re talking about. The report says AT&T Randall Stephenson plans to call it a day soon and has been grooming his mate John Stankey to take over. Stankey was recently promoted the specially-created role of COO, which would be easy to view as a stepping stone to CEO, especially since most of the company now seems to report directly to the COO.

Shortly after activist investor firm Elliott Management announced it had acquired a significant shareholding in AT&T and intended to use that position to pressure the AT&T management into making changes that it reckons will significantly boost the share price. That is the ultimate aim of activist investors like Elliott, which are sometimes referred to as vulture funds.

The WSJ piece mainly seeks to flesh out Elliot’s objectives. It claims the closed, cronyish succession plan is what provoked Elliott into breaking cover and going public with its concerns. The continued promotion of Stankey is considered to be symptomatic of a botched approach to AT&T’s strategy of diversifying towards media, as he has been put in charge of it all, rather than leaving it to the media experts already in place at the acquired companies.

Elliott has rich form in messing with the grand plans or corporate execs, having recently succeeded in preventing Vivendi from controlling Italian operator group TIM while only owning a quarter of it. AT&T is an order of magnitude larger but the same principles apply. If Elliott can convince other AT&T shareholders that its plans for the company will give them a better return than those of Stephenson and Stankey then it could initiate a proxy battle for control of the company.

The handling of the DirecTV acquisition seems to be especially derided by Elliott, which seems to think AT&T should cut its losses and flog it. But its complaints don’t seem to stop there, with Stankey’s control of WarnerMedia apparently a source of grievance too. A lot rests on AT&T’s imminent SVOD service, HBO Max, which will have to succeed in a very competitive market to reassure its investors.